Islamic Banking and Finance as an Ethical Alternative: A Systemic Literature Review

Abstract

"Despite huge global growth rates and a rapidly increasing importance of Islamic banking and finance, research in this area still needs to be classified as nascent. Recent economic events have led to an increasingly critical attitude towards the conventional banking and finance system, whereas Islamic banking is considered to be an ethical alternative not only in Muslim economies but also progressively in the 'western' world. As their business models have their origins in religious and ethical ideals, Islamic banks struggle to observe the foundational Shariah principles while simultaneously meeting applicable guidelines such as Basel III and flexibly adapt to the ever changing customer demands. Due to the increasing importance of Islamic banking and finance, this article aims to analyse and summarise various aspects of current research and sets out to identify both, congruence and inconsistencies between the implied promise of an 'ethical' alternative and the actual market."